Treasury Secretary Timothy Geithner warned Congress Thursday that it must raise the statutory limit on the nation’s debt by the end of March or risk an unprecedented and economically devastating default on American debt.

Geithner, in a letter responding to a request from Senate Majority Leader Harry Reid (D-Nev.), said that his department estimates that the debt limit will be reached between March 31 and May 16. Geithner is requesting action “early this year, well before the threat of default becomes imminent.”

“Never in our history has Congress failed to increase the debt limit when necessary,” Geithner said in the letter, which was sent to all members of Congress. “Failure to raise the limit would precipitate a default by the United States. Default would effectively impose a significant and long-lasting tax on all Americans and American businesses and could lead to the loss of millions of American jobs.”

The official word from the administration starts the clock on what’s likely to be one of the most difficult legislative issues in the early days of the 112th Congress. To underscore the gravity of allowing the debt ceiling to be reached, Geithner listed consequences, which include a “substantial tax on all Americans,” a rise in borrowing costs, interest rate hikes and an increase in mortgage interest rates.

Speaker John Boehner (R-Ohio), in a statement, tried to be firm, saying the “American people will not stand for such an increase unless it is accompanied by meaningful action by the president and Congress to cut spending and end the job-killing spending binge in Washington.”

Speaking to reporters Thursday, the speaker said the nation must increase its borrowing capability because “Washington continues to spend more money than what we bring in.” Yet Boehner acknowledged that “America cannot default on its debt” — a signal that he realizes some action must be taken to avoid a default. The Treasury Department also placed a call to Boehner’s office. Boehner and Geithner are expected to talk Thursday afternoon.

“If the House is going to move an increase in the debt limit, I think we have a responsibility to cut spending and to make changes in the process by which we spend the American people’s money,” Boehner told reporters. “I think you’d be irresponsible to try to deal with the debt limit without taking corrective action so that we’re not facing this each and every year.

The cuts will start Thursday. The House is voting on slashing committee budgets, an act the GOP thinks will save $35 million, a drop in the bucket compared with the overall debt issue.